Folklore

A guide to effective business planning via a winning strategy

A successful strategy establishes questions that unearth information and publicly reveals a clear and accountable opinion about the problem to solve and how to solve it.

In the realm of business strategy, the objective is clear: to win. However, the path to victory is often obscured by misconceptions and pitfalls. A strategy, as succinctly put by Richard Rumelt, is an “informed opinion about how to win”. It involves asking the right questions, revealing clear and accountable opinions about the problem to solve, and how to solve it.
There are hundreds of strategy books, which means nobody knows the answer, and there is no ‘right’ way to define, set, or implement a strategy. 

‍Avoiding bad strategy

Before delving into crafting a good strategy, founders must understand the characteristics of a bad strategy. Bad strategy:

Includes fluff: fluff and weasel words are a form of gibberish masquerading as strategic concepts or arguments - these words don’t mean anything, they are not clear, and you cannot act on them
Overly complex: so complex it can’t be understood or implemented
Avoids the challenge: when you cannot define the challenge, you cannot implement a strategy and improve it - be honest and clear about the problems and the challenges
Mistakes goals for strategy: goals are statements of desire, they are not plans to overcome obstacles. Goals can be guiding outcomes of strategy, but you need to outline the strategy to ensure you are setting the right goals
Is unachievable: when a strategy fails to define and address the critical issues, or is impracticable or unachievable, your strategy will fail
Ignores competition: you need to understand the basis by which a strategy will help you win, who you shall win against, and how you will achieve this
Ignores obstacles: if a strategy ignores the factors preventing it, you will end up with a list of aims and wishes without the information and ideas to achieve them. Include an assessment of the barriers to success: yourself, technology, know-how, team, money, competence, professionalism, tools, and more
Incorrect incentives: the strategy established a misalignment of incentives that disproportionately rewards a few to risk the whole.

‍What is a good strategy

A good strategy is a focus and coordination of effort to achieve a powerful competitive punch.
Good strategy honestly acknowledges challenges being faced and provides an approach to overcoming them, through channelling energy into a finite number of the most attractive opportunities. See resources section for a template.

‍A checklist for a good strategy includes

Logical structure: there is a linear narrative in which each point seamlessly and logically leads to the next
Concise: big concepts are explained with small words, there is an absence of jargon, and as few sentences as possible are used
Avoids fluff: everything is explained in clear, simple terms
Defined challenges: you know and clearly state the challenges you’re facing
Solving problems: each action solves a challenge
First principles: you consider WHY actions are being undertaken
A proximate objective: you have achievable target/s.

The strategy kernel

The strategy kernel serves as the basis for a logical structure in crafting effective strategies. It comprises a diagnosis, guiding policy, and coherent action. Utilising the Strategy Template can provide founders with practical tools for implementing this strategy kernel in their business planning.

‍Evolution of the strategy

It is important to take stock of the progress you have made against your strategy, how the dynamics of your market have changed, and what new information has come to light. Recognise where your initial hypothesis was right, and where it was not shown to be true.
Use these insights to test your original strategy and make refinements where it makes sense to do so.

‍Resources

This resource, and any guidance within it, must not be relied on as legal advice. We recommend that you seek specific advice to deliver an outcome best suited to your situation.